EUROPE MARKETS: European Stocks Higher Ahead Of ECB, Draghi Statements

By Carla Mozee, MarketWatch

LONDON (MarketWatch) -- European stocks were higher and the euro slipped Thursday, with investors waiting for a European Central Bank news conference that could indicate whether the central bank will ramp up its stimulus efforts.

The Stoxx Europe 600 was up 0.2% to 349.90, aided by gains among travel stocks. Ryanair Holdings PLC rallied 7.9% after the budget carrier raised its full-year profit forecast on strong figures from the November period. TUI Travel PLC shares surged 3.6% as the vacation-packages company's fiscal 2014 underlying operating profit came in above its recently raised outlook.

The Stoxx 600 on Wednesday marked its highest close since early June, rising 0.6% to 349.34.

Thursday's marquee event will be the ECB's policy statement, due at 12:45 p.m. London time, or 7:45 a.m. Eastern Time, followed by a news conference at 1:30 p.m. with ECB President Mario Draghi.

Draghi late last month said the ECB will do what it "must to raise inflation and inflation expectations as fast as possible". Those comments were seen as a sign the ECB will increase asset buying to bolster inflation levels and encourage economic growth in the struggling eurozone. There's also been speculation that the ECB could consider purchasing corporate bonds. Read a preview of ECB meeting.

However, RBC Capital Markets said the bank's Governing Council likely wants to see results from a Dec. 11 targeted long-term refinancing operation, also known as TLTRO, before making any policy changes. In the first round of TLTRO, eurozone banks borrowed a lower-than-expected 82.6 billion euros ($101.9 billion).

"[U]nless the uptake in [the December] operation is much higher than anticipated, we think the ECB will be forced to expand its asset-purchase programs into a wider range of securities in the first quarter of 2015," said Sue Trinh, senior currency strategist at RBC Capital Markets, in a note early Thursday.

"So, in order to pave the way for that (and consistent with a probable large downgrade to the staff's macroeconomic projections next week), we expect President Draghi to emphasize the governing council's willingness and readiness to act," she said.

The euro (EURUSD) languished at two-year lows against the U.S. dollar on the prospect of more asset-buying by the central bank. The euro was buying $1.232 compared with $1.2311 late Wednesday in North American trade.

Subscribe to WSJ: http://online.wsj.com?mod=djnwires